It is interesting to read some of these posts and see the differences in how FI's handle accounts when the only owner becomes deceased.

We take some actions, such as canceling any open debit or ATM cards, but we don't lock out the account or stop ACH transactions from posting. The thought being stopping payments for things such as a mortgage or power etc. could cause more harm to the estate (when someone eventually comes forward) than good - and I would think could put us in hot water if loses occur that in turn impact the estate.

We even continue to send statements and letters (usually dormant account letters) to the address on file until they get returned by the post office. We didn't want to send a normal dormant letter to someone we know is deceased - seems kind of heartless, so worked with our legal to draft a dormant account letter for this situation, but I am having some struggles with it and would appreciate feedback.

Would you send it? Do you feel it is walking a fine line of breaking privacy rules? Do you stop all correspondence when the only owner becomes deceased? Keep in mind the letter goes out addressed to the deceased person (exact same title and address as when the owner was living). So we aren't saying, "hey! want fee money? open this letter!" It arrives at the home as it always has.

Here is the letter we've been given:

"It is with our deepest condolences that we are writing you in regard to [customer], who held [an account / accounts] at [BANK].

[BANK] wishes to advise whoever may be entitled to receive or inherit the funds held in [this account / these accounts] to consult an attorney to determine what paperwork needs to be provided in order to legally claim the funds.

If no one comes forward and properly claims the funds, and if the [account remains / accounts remain] dormant for a sufficient period of time, [BANK] will then turn the funds over to the Unclaimed Property Division of the [STATE] Department of Revenue. If the address we have on record is in a state other than [STATE], we are required to turn the funds over to the state on record.

Sincerely,

We do not pay checks beyond 10 days after we receive notice as long as they are dated prior to death. Otherwise, the entire account gets held if it is held individually by the deceased's customer. I would hate to be involved in lawsuits between family members where we paid a $1000 mortgage bill when one beneficiary did not want it paid but you let it get paid any way. No chance. You do not have a right to decide how a deceased customer's money gets spent.

Too much work doing what you're doing in my opinion. It's the executor's job to locate the account there and get you the proper paperwork. We stop all correspondence when we get a death notice.

We do pretty much the same; once we are notified a sole account holder is deceased the account is locked down. No checks are paid unless the branch authorizes them. I have seen a lot of instances where checks come through immediately after death and are dated several months earlier. The serial numbers tend to fall in sequence line with the recently cleared items and not from the items dated around the time the check is dated.

To your point praBSA, we are not making any decisions on what is paid, other than we do not pay checks where we are unable to validate the signature and nothing over 6 months - although the branch would ultimately have to make that decision after viewing the check - so even here all we are doing is continuing to practice sound check law, nothing special or specific to a deceased customer; just consideration that this person isn't going to write any new checks - obviously.

If a customer has a car payment set up to recur every month, and they pass away with no one else on the account, and no benes, would you stop the ACH from pulling from the account? To me I see the risk being that by stopping the payment, the bank is making a decision on what to pay (or more accurately, what not to pay).
What if, due to non-payment, the car is repossessed, and it just so happens to be a very expensive car that had great value to some family member somewhere. I think once they track down the account and the bank they could be pretty upset that the bank made a decision what to pay/not pay.

Maybe my thinking is backwards, but I think taking action is making a decision.
So far it sounds like correspondence stops though when you are informed a customer is deceased.

Any authorization to debit the deceased's account died with them.

I authorize automatic payments in the amount of $xxx to Business beginning on Date.
Signature: Customer Name

Somewhere in the agreement, there will be a statement similar to this. "I authorize..." A deceased customer can no longer authorize anything.

How are you determining that the customer is deceased? Word of mouth? Scanning the obits? Sounds like a silly question, I guess, but unless you are given proof (via death certificate?) isn't it risky to "assume" a customer is dead?

Another question: much like an authorization to debit the account ends with death, does the privacy agreement die as well?

What do you do if the account is held jointly and using the deceased person's SS# and the joint owner will not take the deceased person off the account? Would you send a letter for that?

I would and it would include a check for the account balance.

I agree that grandkids are great! It's not up to the (formerly) joint owner to take the deceased owner off the account. That's the bank's job, although it's great if the surviving owner cooperates.

For accounts opened since 2003, your CIP process should have collected the joint owner's SSN, so the bank has what it needs to unilaterally drop the deceased owner's name from the account, update the SSN used for IRS reporting, regardless of the surviving owner's wishes. If the bank is going to keep the account open, it needs the bank record to reflect the actual ownership of the account. If the account was opened before October 2003 and there's no record of the surviving owner's SSN, an uncooperative survivor would mean the account should get closed.

You guys are the best!
Thanks

Is this post from 2016 not valid or is it incorrect? I found it on the forums here from a 10k Club poster.

>" The RDFI has no responsibility or authority to return preauthorized ACH debits on the death of the person who authorized them.

The authors of the ACH rules were wise to avoid the temptation to impose any such responsibility or even grant any discretion to the RDFI. It is difficult to project any consequential damages from returning the debit for the decedent's gym membership or cable subscription. However, when the item's return could result in the originator turning off the electricity in the middle of winter or suspension of property insurance, the bank's assumption of risk would be clear.

Banks are simply not required to evaluate the circumstances and make decisions with inherent risk. They should not do so.

The responsibility lies with the personal representative appointed to settle the decedent's estate. He or she should act promptly in being appointed and assuming control over the decedent's affairs. As difficult as that might be in some cases, he or she is the person legally designated to stand in the shoes of the decedent and make decisions based solely on those concerns."<